10th April

Analysing the impact of President Trump's 90-day tariff pause on the cryptocurrency market and other significant developments from the past week.

You can read last week's “This week in crypto” here.

On 9th April 2025, President Donald Trump announced a 90-day pause on implementing "reciprocal" tariffs for over 75 countries, citing their non-retaliatory stance and ongoing negotiations with US agencies. This decision came after the US had imposed a 104% tariff on Chinese goods, escalating trade tensions between the two largest economies. In response to China's retaliatory measures, which included an 84% tariff on US imports, President Trump increased tariffs on Chinese imports to 125%, highlighting the intensifying trade conflict.

The cryptocurrency market responded positively to the announcement of the tariff pause. Bitcoin's price surged from below $77,000 to approximately $83,000, marking a significant rebound. Ethereum and XRP also experienced notable gains, with Ethereum rising to around $1,650 and XRP reclaiming the $2 level. This surge in digital asset prices reflects the market's sensitivity to geopolitical developments and the perception that easing trade tensions could bolster economic stability, benefiting risk assets like cryptocurrencies.

Crypto-related stocks mirrored this upward trend. Strategy (formerly MicroStrategy) saw a 24% increase, Robinhood Markets gained 22%, Coinbase rose 19%, MARA Holdings added 17%, and Riot Platforms climbed 11%. These substantial gains indicate a broader market optimism following the tariff pause, as investors anticipate a more favourable environment for technology and digital asset sectors. ​

The broader financial markets also experienced significant movements. The S&P 500 surged 9.5%, marking one of its most substantial gains since 2008. The Nasdaq Composite rose 12.2%, and the Dow Jones Industrial Average gained nearly 3,000 points. These rallies underscore the profound impact that trade policies and geopolitical decisions can have on market sentiment and investor behaviour. ​

However, it's essential to note that while the 90-day tariff pause has temporarily relieved the markets, underlying trade tensions remain unresolved, particularly between the US and China. The increased tariffs on Chinese goods and China's retaliatory measures indicate that the trade war is far from over, and future developments could introduce further volatility into the markets. ​

In the cryptocurrency sector, the recent market rally has reignited discussions about the role of digital assets as a hedge against geopolitical uncertainties. Some analysts suggest that cryptocurrencies like Bitcoin may serve as "digital gold," offering investors a store of value during times of economic instability. However, others caution that the high volatility inherent in the crypto market could pose risks for those seeking safe-haven assets. ​

Furthermore, the regulatory landscape for cryptocurrencies continues to evolve. In light of recent market movements, policymakers may intensify their focus on the crypto sector, potentially introducing new regulations aimed at ensuring market stability and protecting investors. Market participants should stay informed about regulatory developments, as these could have significant implications for the future of digital assets.​

Overall, while the 90-day tariff pause has temporarily boosted traditional and digital asset markets, investors should remain vigilant. The ongoing trade tensions and potential regulatory changes underscore the importance of a diversified investment strategy and a thorough understanding of the risks associated with various asset classes.

The announcement of the tariff pause elicited varied reactions from prominent business figures and economists, reflecting the complexity and far-reaching implications of the decision.​

Hedge fund manager Bill Ackman praised the move as a strategic negotiation tactic to identify key trade partners and isolate China. He viewed the pause as an opportunity for the US to strengthen alliances and create a united front in addressing trade imbalances and unfair practices. ​

Conversely, economist Diane Swonk expressed concerns that the pause might result in a higher effective tariff rate, potentially exacerbating economic risks. She highlighted the uncertainty that such policy shifts introduce into the market, which can deter investment and disrupt supply chains. ​

Elon Musk, CEO of Tesla and SpaceX, voiced apprehensions regarding the tariffs' impact on production costs for Tesla. He advocated for the establishment of a zero-tariff free trade zone between North America and Europe, emphasising that such an arrangement would promote fair competition and benefit consumers. ​

These perspectives underscore the complex implications of trade policies on various sectors and the broader economy. While some view the tariff pause as a strategic move to recalibrate trade relationships, others caution against the potential economic disruptions and advocate for more stable and predictable trade policies.​

In the wake of the announcement of the tariff pause, Senator Adam Schiff called for a congressional investigation into whether President Trump or his associates engaged in insider trading or market manipulation. The significant market surge following the announcement raised concerns about potential financial gains linked to the timing of the policy change. ​

Senator Schiff emphasised the need for transparency and accountability, stating that any indication of individuals profiting from prior knowledge of policy decisions undermines public trust in the administration. He called for a thorough investigation to determine if any unethical or illegal activities occurred in relation to the timing and communication of the tariff pause.​

The White House has yet to respond to these allegations. The outcome of this potential investigation could have significant implications for the administration and may influence future policy decisions and market reactions.​

The ongoing trade dispute has heightened market volatility, leading to increased caution among investors. Analysts suggest that the cryptocurrency market's trajectory will heavily depend on the resolution of these trade tensions. A swift agreement between the US. and China could bolster investor confidence and potentially drive a recovery in crypto prices. Conversely, a prolonged conflict may exert further downward pressure on the market. ​

In light of these developments, market participants are advised to closely monitor geopolitical events and assess their potential impact on digital assets. Diversifying portfolios and implementing risk management strategies may be prudent approaches in navigating the current landscape.

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